Possibility of cheap finance corporation

Agri SA and the Transvaal Agriculture Union (TAU) are among a group of stakeholders involved in discussions about the establishment of an agricultural development corporation to provide low interest rate loans from overseas donors to commercial farmers.

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Francois van den Berg, a member of Agri SA’s Africa Committee, said discussions are still at an embryonic stage. Despite donating millions in aid in the past with little success to show for it, overseas donors are still prepared to invest in agriculture – provided it’s done through a business entity with integrity and with whom organised agriculture is involved, he added.

“They won’t invest in  unstructured organisations. To access the funding it’s extremely important that the money flows through a correctly structured organisation that can lend the money in an orderly manner and in accordance with normal business practices to agricultural project developers.”

Van den Berg is positive about the initiative and believes it could help farmers access “cheap money” with interest rates far lower than commercial bank rates. “We’ll need funding in South Africa to get it off the ground,” he said. “But the idea has not even been approved by Agri SA yet. We’ll discuss it at our annual general meeting in October.” TAU general manager Bennie van Zyl added, “There’s a lot of finance available abroad, but there’s a long road to travel before we can offer anything to farmers”. 

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